Consumer mood perks up as holiday shopping season approaches

Economy watchers had plenty of news to follow last week as the government issued reports on retail sales, producer prices and consumer prices, but it was consumers themselves who spoke the loudest and they had encouraging things to say.

Economy watchers had plenty of news to follow last week as the government issued reports on retail sales, producer prices and consumer prices, but it was consumers themselves who spoke the loudest and they had encouraging things to say.

0

SHARES

Economy watchers had plenty of news to follow last week as the government issued reports on retail sales, producer prices and consumer prices, but it was consumers themselves who spoke the loudest and they had encouraging things to say.

The mood of the American public, as measured by the University of Michigan’s preliminary Consumer Sentiment Index for October, has brightened considerably. The index rose to 92.1, the first advance in four months, from 87.2 in September. Bloomberg said lower-income Americans projected that wage gains will accelerate.

Reuters said the report suggested that the economic recovery remains on track despite a strong dollar and weak global demand.

"This suggests that U.S. household sentiment has turned an important corner and is a hopeful sign on the outlook for consumer spending activity going forward, given signs of weakness in other parts of the economy," Millan Mulraine, deputy chief economist at TD Securities in New York, told Reuters.

Consumer spending accounts for more than two-thirds of U.S. economic activity and has been the bright spot in the economy. If consumers soon begin to match their spending to their mood — and the all-important holiday shopping season is approaching — the economy could start to generate increasingly consistent growth that lasts into the new year.

The Commerce Department’s retail sales report for September showed that the public remained cautious as summer was ending. The department said retail sales showed little growth for the month, rising just 0.1 percent, although Reuters reported that consumers bought more cars and furniture and spent more on hobbies, clothing and eating out. That points to underlying strength in domestic demand, which Reuters said should provide some cushion against softening global growth.

Separately, the Labor Department said the producer price index fell 0.5 percent in September. The drop was the largest since January.

On Thursday the Labor Department said the consumer price index fell by a seasonally adjusted 0.2 percent in September in what was the second consecutive month of overall price declines. The Wall Street Journal said the monthly pace of inflation has been steadily falling since May, when renewed weakness in gas prices took hold.

Excluding the volatile food and energy categories, however, prices rose a relatively firm 0.2 percent in the month and a moderately healthy 1.9 percent during the past year.

The Fed will hold its next-to-last meeting of 2015 on Oct. 27-28. The final meeting will be on Dec. 15-16.

Reuters said the Fed tracks the personal consumption expenditures price index, excluding food and energy, which is lower than the core CPI. Inflation has consistently run below the Fed’s 2 percent target, discouraging the central bank from following through on its announced plans for a rate increase.

The Marine Industries Association of South Florida and the Marine Industry Cares Foundation, organizers of the 41st Annual Broward County Waterway Cleanup held on March 3, collected 32 tons of trash from 31 sites around the county.